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We work with large corporations and entrepreneurial companies to affect change in a manner that allows both to increase their pace of success. In doing so, we have learned a lot about what drives and what impedes those successes.


Managing Disruption


We have developed a series of briefs which summarize our thoughts on a number of topics that we believe are most challenging for incumbent corporations as they face the rapid technological disruption of  industries they have historically dominated.   Each represents a topic we have spent significant time studying and discussing with corporations undergoing such changes over the last four decades.  As a result, each is only a snapshot of our views on the subject:

Characteristics of Highly Successful Entrepreneurial Companies


These are characteristics we have observed with regularity over three decades amongst the most successful entrepreneurial companies and across four separate industries.  This list focuses on those characteristics that apply differentially to younger, smaller companies.  There are many other important characteristics of corporate success, but they tend to be shared across companies both large and small.  We have divided these characteristics into two main groups: Those that are cultural and those that are structural.


The cultural aspects are neither a strategy nor a process; they are a way of being, a way of behaving and a core aspect of each company’s culture.  They are also increasingly hard to maintain over time and as companies become large; as a result they are often a comparative advantage that startups have over incumbents and one that incumbents must recognize, but frequently cannot emulate.


The structural aspects can sometimes be emulated or adopted successfully by larger enterprises, but they too are often best executed by smaller, more nimble and less democratic enterprises.


Cultural Aspects of Transformation

A Different Kind of Leadership


  1. Deep domain knowledge

  2. Insight not process driven

  3. Extremely focused on detail

  4. Fully committed to a clear but often privately-held vision

  5. Rarely a team player, often a tough to work for manager

  6. Defining characteristics of a Jobs, Musk, Gates, Zuckerberg, Brin & Page


A Positive View of Breaking Rules


  1. Ask not for permission but beg for forgiveness

  2. Understand that most rules protect the status quo – things you are trying to change

  3. Understanding which rules are “laws of physics” and which are “conventional wisdom” is key

  4. Much of this rule-breaking behavior isn’t tolerable in the traditional corporate environment

  5. Note that rule-breaking applies to the organization more than the individual   


A Team with a Pioneering and Immigrant Culture


  1. Individuals with a strong desire to pursue a new direction

  2. Invented everywhere replaces N.I.H.

  3. Promote individualism and diversity

  4. Eliminate status and entitlement

  5. Appetite and tolerance for risk

Expertise at Extreme Risk Taking and High Risk Tolerance


  1. Be very good at assessing and understanding real risks

  2. Have high risk tolerance as a function of prior risk taking successes

  3. Use experience to get ever better at assessing and managing risk

  4. Live every day with the stark realities of life without a safety net

  5. Balance risk against competitive paranoia


Do Anything and Everything, but Fail Quickly


  1. There is no “try” there is only succeed or fail, so stop trying, start doing and fail quickly so you can do again

  2. Never say no to a crazy new idea, but force commitment to ideas

  3. Focus efforts on rapid testing, redirection, retesting in the market

  4. Learn from failures, be paranoid, bring a now, not tomorrow, work ethic



Structural Aspects of Transformation

Be Both “Creatively Destructive” and “Destructively Creative”


  1. Understand the new is highly likely to cannibalize the old, and accept it

  2. Understand that incumbency gives you strength, but also ties you to the past; it means you have much more to lose than those who start with nothing – and are likely to behave accordingly, to your detriment

  3. Never underestimate that the new way can open doors to far greater opportunity than were available to the old

  4. Acknowledge the “Innovator’s Dilemma”: the reality that it is hard for leading firms to make large bets on new technologies when they can get larger near-term returns with business as usual

  5. Understanding that the conspiracy of market forces and incumbent inertia gives entrepreneurs a significant opportunity to dominate new businesses in a way that seems completely disproportionate to their initial skills and capabilities

Replace Incrementalism with Transformative Insight and Action


  1. Incrementalism is what you are already good at

  2. Wanting success doesn’t create it, learn what it takes and act decisively when opportunity presents itself

  3. Insightful leaps are what you need to embrace

  4. Creating an internal culture of insightfulness is really hard and takes Google-like commitment

  5. Deeply understand the patterns of transformative growth of new industries – those who survive from old to new act early, act aggressively and don’t slow or stop when the going gets hard

  6. Be “antifragile” – embrace the spirit of “that which doesn’t kill me strengthens me,” embrace change, risk and volatility


When Fast and Innovative Beats Steady and Incremental


  1. Big no longer necessarily outdoes small

  2. Contract manufacturing and nimble supply chains today enable rapid growth in virtual size

  3. Willingness to let a thousand ideas blossom also requires very rapid pruning to trim away all but the biggest and best

  4. You have to be five times better not fifty percent better

  5. Shift from labor intensive to thinking intensiv

Establish Real options and Exercise Them


  1. Real options mean just that, if you are going to invest $200M on internal R&D then bet a similar amount on competing external efforts

  2. This is a 95/5 not an 80/20 game; most large corporations prefer 60/40 odds, as a result they hit single and doubles in a home run game

  3. Decide when you are going to pick a winner and be willing to substitute the external for your internal effort; then  establish a new external competitor

  4. Don’t acquire external efforts at a scale too small to survive in your corporate enterprise; know the size at which you have historically made successful M&A deals with new business units

  5. Generally, buy 19% of external efforts to avoid consolidation but maximize low cost pre-buying of future M&A to create real option commitment

  6. Remember that it’s about the people not the technology – most corporate VC is good at picking technologies and really bad at picking great leaders

Aggressively Network and Partner


  1. Modern winners understand that while they are being individualistic and risk-takers they also need to be deeply networked and partnered

  2. Substitute contract manufacturing for internal scale-up whenever possible

  3. Develop a global supply chain and distribution channel early, understand the huge value of having the right partners

  4. Focus on doing what you do best and partner for the rest

  5. Use networks for competitive intelligence and healthy paranoia

Why Corporate Venture Frequently Disappoints


  1. Most corporate venture efforts are not real options; they are ways of giving existing business units a view of the future that then tends to be used for protective rather than transformative purposes

  2. Most efforts are subscale, i.e. $100-200M in size

  3. Most come into being at the top of the addressable market and get killed at the bottom – exactly out of phase with success metrics

  4. Most cannot hire managers on a competitive basis with the independent fund world; as a result, most managers are using the corporate fund as a learning process and stepping stone toward an external fund

  5. Most funds take their direction from the business units (tactical and defensive) rather than from the CEO (strategic and forward looking)

  6. Most focus on investments in technology; success is historically tied far more to management talent

  7. Most compete with rather than networking and teaming with other corporate funds and most are to closely tied to one rather than several outside sources.

Historic Patterns of Note

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